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Saturday, November 23, 2013

Bankruptcy....

Scary. Nerve-racking. Stress and anxiety inducing. Just some of the words I would use to describe how I feel as we start the process of Matt filing for bankruptcy. I feel like I have been on a roller coaster the last couple of weeks and that there isn't an end to close in sight. Part of my problem is the fact that I have been reading so much on bankruptcy and how awful and terrible it truly is and that it should only be a last resort. I have questioned over and over if it is really at that point....and at this moment I am 99.9% sure that it is. If you would of asked last weekend I would have said only 50%. My emotions and brain have varied that much and fought with each other constantly. I would definitely call it a war against myself. Matt and I have talked about it a lot but I have spent even more time reading from all sorts of sources, government websites, legal websites, blogs, articles, newspapers, and the list goes on. I still plan to do more reading once I can get to the library. I want to move on and recover from this as quickly as possible.Started reading a Dave Ramsey book and a book by Wall Street Journal about recovering from financial blows. The Dave Ramsey book I believe is from the 90s (slim pickings at the local library) but it is more about his philosophy and I figured it was a good place to start. I want to take control of our finances and not let this bankruptcy thing ruin our lives. I found in all my searching of the internet via Google, other various search engines, and even Pinterest that there was very little about bankruptcy from a personal perspective. People are, in my own opinion, afraid to admit where they are in life and what that means. Sharing something like "I am declaring bankruptcy" seems like something shameful which is another thing I have felt on my roller coaster of emotions. But I don't necessarily think that it is something shameful, in this economy especially. It just seems scary to me that Matt and I both work full time and there is no other real solution to this problem. The debt just hangs there. In our case we decided bankruptcy was the best option for the following reasons:

Unreasonable collections agent. We tried multiple times to work with this lawyer who was trying to collect the debt on behalf of the finance company where Matt had the loan for the truck that was repossessed. He was completely unreasonable even though we showed him point by point there was no more money than what we were giving him. He proceeded to take further legal action after reaching a judgement without ever contacting my husband. So we could either get an attorney and fight it out in court (spending who knows how much on legal fees), try debt management (where the payments are completely ridiculous for years on end) or file bankruptcy and have the debts settled and make some ridiculous payments for a smaller amount of time.

Only Matt has to file. I know this may seem like I am putting the blame on my husband and if you think that you are totally misunderstanding what I mean by this. I just mean that at least one of us will still have (semi) decent credit in case of emergencies. Everyone makes mistakes, mine were different than Matt's. He made stupid financial decisions, I made stupid decisions about who I spent time with and what I was doing with my life. And my stupid financial decisions are part of the reason bankruptcy is the best option as well. All of my debt that we are able to pay but no other money to pay his debts. My husband is willing to bear this mark on his credit so that we can have a better life in the future. To me that is true sacrifice and one of the reasons I love him.

Wanting to move past this. I understand that bankruptcy will affect us for years to come but in all honesty we were not planning to buy a house for at least 3 years. Yes we may have to extend that out further now. But we don't know where we want to settle and in this case it is best we don't make a big decision like that quickly. I have done tons of research and know what will need to be done to bring his credit back and we are willing to go through that together.

For some people these reasons may make no sense whatsoever. In all honesty that kind of bothers me. That is the judgement people place upon those deciding to declare bankruptcy. People can think what they want but going through this brings me to a better place and makes me more understanding of those in dire financial situations. I praise God that Matt and I's situation is not worse and I know it could be far worse.

Right now we are at the point in the process where we have given the attorney all of the financial information and waiting to see if he qualifies for Ch 7 (total bankruptcy) or Ch 13 (where part of the debt ends up bring repaid in installments). This depends on where we fall with the median income in Michigan. We have to get copies of a couple more things to the lawyer then we will hopefully know when he will be able to file. We are shooting for December because we want to stop making payments to the collection agent without causing too much trouble.

Currently in the process of overhauling our budget once again as well. Have learned we spend more on gas than I had originally thought plus want to reconcile budget with number we gave to lawyer.

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comments:

My family went through this same thing after 2008 when the real estate market crashed and we had a lot of real estate that didn't move. We lost all our capital and also had a lot of debt to pay off. After 5 years with the grace of God, we managed to pay off all the bills and now is able to save some money.

My point being, if we can do it and hang in there, give up things until the bills are paid, you can do it too. Don't give up!!!